Forge Company Wants to Purchase a New Cutting Machine for Its

question 147

Multiple Choice

Forge Company wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual cash inflows of $140,000. The required rate of return is 10% and the current machine is expected to last for seven years. Of the following choices, which is the dollar amount the company would be willing to spend for the machine, assuming its life is also seven years? Income taxes are not considered.

• A) $1,328,180
• B) $882,000
• C) $702,660
• D) $681,520

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Definitions:

Implicit Leadership Theory

A psychological theory proposing that individuals have preconceived notions about the traits and behaviors that make an effective leader.

Visionary Leader

A leader who has the ability to envision future possibilities for an organization or group and inspire others to align with and work towards that vision.

Performance Standards

The set benchmarks or criteria established for evaluating the effectiveness and efficiency of tasks or job functions.

Situational Leadership Model

A leadership model that proposes leaders should adapt their leadership style based on the types of people they are leading and the requirements of the task.